Making Insurance Markets Work for the Poor in Botswana, Lesotho, Namibia and Swaziland - Scoping Study

Providing an overview of the insurance market
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This document presents a scooping study on access to insurance services by the poor in Botswana, Lesotho, Namibia and Swaziland. The study aims to:

  • Provide an overview of the current situation in these markets;
  • Outline the current market structure and document the dynamics and current initiatives.

The paper argues that:

  • It is important to consider the broader risk framework when evaluating any notion of access to insurance services;
  • Risk mitigation extends beyond insurance to include other options such as savings;
  • Not all risks faced by lower-income households conform to what is considered to be insurable.

The paper examines the following aspects of insurance in the countries studied:

  • Government and informal provisions;
  • Short-term and long-term insurance;
  • Regulation;
  • Innovation;
  • Distribution and premium collection;
  • Competition.

The paper concludes by summarizing key issues for all the countries studied:

  • HIV/Aids: insurance can facilitate treatment by designing appropriate insurance products;
  • Distribution and payment collection: infrastructure has to be developed to make transactions easier;
  • Regulation: it is still in the process of development;
  • Lack of market and demographic information: this makes development and pricing of products difficult;
  • Dominance by foreign insurers: this leads to lack of local product development;
  • Informal providers: they play an essential role, but it is not clear how they could fit into the formal financial sector and regulatory framework;
  • Consumer education and financial literacy: these are yet to be developed.

About this Publication

By Bester, H., Chamberlain, D., Hawthorne, R., Malherbe, S. & Walker, R.